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It may have been inspired judgment — or perhaps just a remarkable coincidence — that British prime minister Theresa May set out her commitment to reform “irresponsible behaviour in big business” only days before Mike Ashley and then Sir Philip Green had their reputations shredded by UK parliamentary committees. In Mr Ashley’s case it was for the “Victorian” treatment of employees at his retailer, Sports Direct, while Sir Philip was accused of “systematic plunder” of BHS, the department store chain he once owned.

But what can realistically be done to bosses who sail close to the wind yet stay within the limits of the law? They can be named and shamed, though perhaps they don’t care. They will say that the market is the best discipline — workers, investors and consumers can walk away from companies they dislike.

In reality, “irresponsible business” means different things. A company may behave with an admirable degree of responsibility to its customers but at the expense of its workforce. Alternatively, while another company may not be faulted for its treatment of customers and workers, it could take a cavalier approach to carbon emissions or paying tax to a host government.

In some areas there is less ambiguity. Corporate irresponsibility in banking led to systemic collapse affecting numerous other companies and millions of individuals. Yet few of those responsible for the 2008 crisis suffered any punishment beyond reputational damage. Prolonged inquiries provoked excoriating criticism, but little else.

The financial crisis has, however, led to two major regulatory changes with potentially wider application. Bankers can now be prosecuted in the UK for extreme recklessness even if there is no malign intent: the financial equivalent of manslaughter rather than murder. And UK traders now have to take their rewards in stock redeemable after several years, maintaining responsibility for past transactions. That principle of continuing responsibility, with clawbacks, could be a way of entrenching responsibility more generally in business, including among advisers.

Business irresponsibility is often found in activities that are already regulated but where oversight is weak. Companies are obliged to comply but they will claim that they have a duty to their shareholders not to over-comply.

But if the legitimacy of private enterprise is to be upheld, corporate responsibility must be more than staying just the right side of ineffective, under-resourced regulators. It must also comprise more than using deep pockets to browbeat the authorities with expensive litigation or ruthlessly exploiting legal and administrative ambiguity.

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So what is to be done? One approach could be to strengthen the standards around directorships, as has happened already for bankers. The obligations on company directors under the UK’s 2006 Companies Act are wide and encompass much of what we call responsible capitalism. But the bar for disqualification is high and even the most egregious behaviour is tolerated. Directorships could be treated as a profession with standards and ethics, and enforced by an oversight body.

A second approach would be to build on the advances already made in corporate governance. However, reliance on non-executive directors and long-term institutional investors to police company behaviour, along with more transparent and extensive reporting requirements, have had limited impact. When in government, I sought to strengthen corporate governance around executive pay, though highly paid financial intermediaries, remuneration consultants and non-execs had little appetite for slowing the gravy train. I would like to have gone further in involving staff. Mrs May has come to the same conclusion. The proposal will be debated further, but the fundamental point is that a wider definition of stewardship is needed.

Third, businesses should consider examples of good practice in different forms of corporate organisation. Private businesses often have longer-term time horizons than public companies. Retailers have the worker-owned John Lewis Partnership as a role model and comparator. The mutual financial sector offers alternative ways of conducting banking and insurance — in spite of the Co-operative Bank’s failure. Social enterprise is growing rapidly in some industries, offering an alternative to shareholder capitalism: doing well and doing good. We need more.

The writer is a former UK business secretary and author of ‘After the Storm’